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Why Directors Need To Be Involved In Strategy

31 March, 2017

It can be hard to get the right people involved in making the strategic decisions and therefore deciding an organization’s strategy. Should the directors be involved? Should the executives be involved? Should both be involved?

Faced with this, organizations sometimes fall back to the old ways of Strategic Planning.

Which today, isn’t a good thing.

The old ways

In the old ways of Strategic Planning directors weren’t involved in producing strategy at all. Executives produced it. Directors stated the Purpose and the Vision, then occasionally reviewed and approved and monitored the implementation of Strategic Plans.

Perhaps that worked a long time ago when the world was a more stable and predictable place. When things didn’t change much. When markets and economies grew more consistently. When business was not so competitive. When strategic decisions were simple, and could be made infrequently.

Not so today. When markets come, and go, and cycle much faster than they did before. When industries are more complex and change quickly – new products, new competitors, new technologies, new regulations, economic changes, and so on. Executives haven’t got the bandwidth to stay on top of all that, and execute Strategy at the same time.

To produce quality strategy today, directors with the necessary skills need to be continuously involved in making the strategic decisions.

This is an important change that we need to embrace because we’ve seen the benefit of making a change like this before.

How Manufacturers improved the quality of what they produced

In the 1980s western manufacturers were struggling to compete with new products, new technologies and new work methods mainly from Japan.

One of their major problems was the quality of what they produced.

At the time, western manufacturing workplaces were demarcated. They employed two types of people: production workers who produced the products, and Quality Control (QC) Inspectors who inspected the products to ensure they were fit for purpose after they had been produced. The inspection process resulted in either a pass, rework, or scrap decision.

The quality of the resulting products was awful. It wasn’t clear who was responsible for quality. Was it the production workers whose performance was measured and rewarded based on the number of products they produced? Or was it the QC Inspectors who inspected the products after they had been produced and who were not involved in their production.

A key cause of the quality problem and therefore its solution was the way quality was involved, or rather not involved, in production. A significant improvement in quality occurred when ‘Quality Control’ was replaced by ‘Quality Assurance’, which in practice meant that quality was involved in the production process to ensure that quality products were produced, rather than involved afterwards to identify those products that were not fit for purpose.

Who should be involved in making the strategic decisions today?

In the complex fast-paced world we work and live in today, directors can’t be involved in strategy like old fashioned Quality Control Inspectors – occasionally reviewing and approving Strategic Plans.

No argument that boards are responsible for governance. No argument that executives are responsible for executing Strategy.

But today, to produce quality strategy, directors with the necessary skills need to be continuously involved in making the strategic decisions.

Which is a point made with authority by Professor W. Edwards Deming who is credited with launching the Total Quality Management movement. In his 1986 book ‘Out of the Crisis’, Professor Deming wrote: 

“Divide responsibility and nobody is responsible.”

“Cease dependency on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place.”

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